If you’ve ever considered bankruptcy as a way of dealing with your debts, you may have heard you have to cooperate with the ‘official receiver’ – but who are they, and what’s their role during the UK bankruptcy process?
In this post, we’ll explore who the official receiver is, what they check during a bankruptcy, and how it can impact a person’s financial affairs.
Who is the official receiver?
The official receiver is a Representative of the Insolvency Service appointed by the court when someone goes bankrupt in the UK.
They are responsible for administering the bankruptcy process and ensuring it is carried out as specified in The Insolvency Act.
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What are the duties of the official receiver?
The bulk of their duties relate to ensuring the individual adheres to the rules and laws that govern the bankruptcy process.
This might involve evaluating bank statements and financial records, making sure creditors are paid properly, investigating any financial misconduct related to credit use, and compiling data concerning assets of those filing for bankruptcy status.
Ultimately, the official receiver decides whether the person filing for bankruptcy has fully complied with all applicable banking regulations throughout their financial journey leading up to this point.
When do I cooperate with the official receiver?
Cooperation with the official receiver is essential at three stages of the bankruptcy process in the UK.
During bankruptcy order
At the official receiver interview (pre-bankruptcy) you need to provide meaningful and honest answers, showing proof of identity and outlining your financial situation, including how much debt you have, which bank accounts you use, etc.
If you are found to have lied to, or misled, the official receiver during the official receiver interview, it could harm your bankruptcy application and even lead to legal action being taken against you.
Official receiver interview
During your bankruptcy order, you must continue to keep the official receiver updated on your financial situation.
You will be expected to provide statements on your income and expenditure throughout the bankruptcy process – which typically last 12 months – and notify them of any changes.
Even after you’ve been discharged from bankruptcy, the official receiver will need to be sure that all rules have been accepted and adhered to throughout the process.
They will examine if there has been any inappropriate credit use or impropriety during that time, so keeping an active dialogue with your official receiver throughout is key to ensuring they can make decisions quickly and accurately.
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What does the official receiver check?
The official receiver plays a crucial role in the UK bankruptcy process by ensuring that individuals have followed the necessary rules during the bankruptcy order.
If you’ve followed the rules during your bankruptcy
During your bankruptcy, the official receiver will need to confirm that steps are taken to avoid getting into more debt, for example preventing someone from taking out credit of more than £500 during this period.
Other checks include whether the individual is acting as a company director or private sector Insolvency Practitioner (IP), both of which are not allowed during bankruptcy.
If your financial situation has changed
You must abide by the rules of the UK bankruptcy throughout the process, and giving an accurate overview of any changes in your financial circumstances is part of this responsibility.
The official receiver will need to be informed of any changes in your financial situation during the bankruptcy process.
You need to let them know if your income has gone up or down, if you have received a lump sum of money, or if you’re using a new bank account, as this could have a knock-on effect on any Income Payments Agreement (IPA).
You should also inform them of any changes in your personal life that are likely to have an impact on your finances, such as if you get married or divorced during your bankruptcy order, or you decide to have a baby.
If you have committed any bankruptcy offences
If you are going through the UK bankruptcy process, the official receiver will need to check whether or not you have committed any bankruptcy offences.
This includes if you have followed a bankruptcy restrictions order (BRO) during your bankruptcy period, or if you have adhered to a bankruptcy restrictions undertaking (BRU).
The official receiver may also look into other types of offences that may have been committed during the process, no matter how minor.
If any issues do arise, it is important to address them in order to move forward with your financial recovery.
Will I have to deal with the official receiver after bankruptcy?
As long as you have cooperated fully with the official receiver throughout the bankruptcy order, you will typically be discharged from your bankruptcy after 12 months, and your debt repayments will be taken care of.
It’s important you comply with the official receiver’s wishes right up until discharge, however. If you fail to do so, the official receiver can apply for a court order which will result in your discharge being suspended.
Where can I get more information on protecting myself from bankruptcy?
If your debt repayments are weighing you down and the future seems uncertain, now is the time to seek experienced debt support.
Your Debt Expert can offer you trustworthy debt advice and debt management plans that fit your individual circumstances, helping you pay creditors at a rate that suits you.
To find out how we can help you deal with all your debts and protect your credit report, just reach out to Your Debt Expert today.